Pace of VC Deals Picks Up as Focus Reflects a Change.Venture capital firms Name Location Founding date Managing Partners/Directors Specialty Capital managed 5AM Ventures Menlo Park, CA; Waltham, MA 2002 John Diekman, PhD (managing partner), Scott Rocklage, PhD (managing partner), Andrew Schwab (managing partner) life sciences $200M [1] kept pouring money into Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. growth companies in the second quarter, but preferred to invest in previously funded enterprises rather than in brand-new ones. The $728.7 million invested during the quarter ended June 30 represents a jump of more than 100 percent from the same period a year ago, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. PricewaterhouseCoopers LLP's quarterly Money Tree survey. The second-quarter total was also 22 percent more than the $599.3 million invested locally during the first quarter ended March 31. The increase is an undeniable sign that venture capitalists Venture Capitalist An investor who provides capital to either start-up ventures or support small companies who wish to expand but do not have access to public funding. Notes: Venture capitalists usually expect higher returns for the additional risks taken. are betting the L.A. area will continue to spawn companies benefiting from the Internet revolution. VCs' strong preference for established companies seems to indicate a new cautiousness, possibly due to the sharp drop in Internet stocks this spring. The number of VC deals in the L.A. area (which includes Santa Barbara Santa Barbara (săn'tə bär`brə, –bərə), city (1990 pop. 85,571), seat of Santa Barbara co., S Calif., on the Pacific Ocean; inc. 1850. and Ventura counties) actually dropped from 48 in the first quarter to 44 in the second, with only 11 of those companies receiving funding for the first time. Meanwhile, the average deal size jumped to $16.6 million in the second period from $12.5 million in the first. "The VCs are being more selective in what they go after and are making bigger bets," said Richard Withey, partner in charge of technology and entertainment for Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, at PricewaterhouseCoopers LLP LLP - Lower Layer Protocol . "There were more investments this quarter going to the second and third rounds of funding rather than the seed round." Investors definitely gave the cold shoulder to Internet commerce companies, with virtually no e-tailers getting any new funding during the quarter. Instead, VCs favored firms with some sort of proprietary technology or those involved in developing online infrastructure. "The kind of companies funded in the e-tailing and B-to-C space that were getting funded six or nine months ago aren't (getting funded now)," said Withey. "Venture capitalists aren't backing away from the technology and Internet sectors at all, they're just more focused." Several L.A.-area companies got well over $25 million during the April-June period. Fasturn, a business-to-business company that developed an online network for apparel and home furnishings, got $45 million, while PeopleSupport.com, an Internet customer-support firm, received $50 million. |
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